BMC Software's transition from a public company to a private one thanks to a near $6.9 billion acquisition deal led by Boston-based Bain Capital and Golden Gate Capital could give a much-needed boost to the company's enterprise services business, which has endured a "struggle" in recent years, an expert told the Herald yesterday.
"It seemed the deal was the best way to try to move forward with the business to better position it in a market. The new owners' ability to do that will likely result in whether this is a good transaction or a great transaction," said Kirk Materne, managing director of Evercore Partners. "There isn't much downside risk because of the (company's) mainframe business, which has high cash flow."
The Houston-based business service management company, which is being bought by an investor group that includes GIC Special Investments Pte Ltd and Insight Venture Partners, saw its shares close at $45.42, up 2 percent from Friday.
BMC, which has an office in Waltham and competes with Oracle Corp., SAP AG, CA Inc. and Compuware Corp., reports its fourth-quarter earnings today. The company's revenue is expected to have risen just 3 percent in the year ended March 31 to $2.23 billion, compared to 5 percent growth the previous year.
Paul Singer's hedge fund Elliott Management, which owns 9.6 percent of BMC common stock, has been pushing for change for a year and has agreed to vote its shares in favor of the transaction, officials said. The deal is expected to close later this year.
While BMC's enterprise division manages networks, databases and storage and generates nearly two-thirds of total revenue, the company's enterprise technology and "go-to-market approach" have "gotten a little stale," which could spur reorganization from the investor group, Materne said.
BMC spokesman Mark Stouse said, "I think that it is clearly on the right trajectory. Are there ways we can make it better? Absolutely. The investor group looked at that and said, 'We can see great things in the future.' We're going to see a lot of commitment to growth across the company."
Herald wire services contributed to this report.
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